In a development template, how do I make the deficits funded by senior debt instead of by equity?

Here are the steps that you can follow. Please note that these instructions do not have tab numbers but rather the title of each tab. This is because this method can be applied across all of our development templates, in the event that you would like to modify any of the other REFM development products that you own.

Step 1. On the "Monthly Sources & Uses" tab under each of the equity funding tranches, write an if statement that will subtract out the pro rata share of each tiers equity contribution and place this in each equity row titled: "Operating Deficit and Financing-related Deficits Draw"

Step 2. On the "Monthly Sources & Uses" tab under the "Senior Loan" funding tranche, add the "Operating Deficit" line reference and the Subtotal Eligible Development Costs in the Senior Loan "Direct Project Costs Draw" formula. It should be added to one half of the formula, specifically, the segment that is subtracting all equity and prior tiers of debt from the reference to the "Subtotal Eligible Development Costs for Senior Loan Funding".

Step 3. On the "Monthly Sources & Uses" tab under the "Cash Reserves for Late Development" funding tranche below the Senior Loan, add the Operating Deficits line reference to the Direct Project Costs Draw

Step 4. On the "Capital Structure" tab under the "Deficit Funding" reference, subtract the operating deficits so that only financing deficits are present. The "Deficit Funding" cell can be found under the heading of "Deficits Funded By Equity ~". This is located after "Share of Developer Equity" and prior to Equity Investment Including Deficit Liabilities"

The value being subtracted can be found on the Monthly Sources and Uses of funds tab under the Operating Deficits line. Subtract the total for that line.

Step 5. On the "Cash Flow Monthly" tab, please check the deficit line under "Financing Cash Flows" to guarantee that there is no double funding of operating deficits.


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